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Last Updated : Dec 03, 2013 05:12 PM IST | Source: PTI

GAIL in talks to acquire stake in Tanzania gas block

GAIL was keen to buy part of Ophir Energy Plc's remaining 20% stake in blocks 1, 3 and 4, which are estimated to hold an estimated 15 trillion cubic feet (tcf) of gas reserves.

 
 
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GAIL (India) Ltd, the country's biggest natural gas distributor, today said it is in talks to acquire Ophir Energy's 10 percent stake in gas blocks in Tanzania.


"We are in talks are irrespective of Singapore's Pavilion Energy reportedly buying half of Ophir's stake. We continue to be in dialogue," GAIL Director (Marketing) Prabhat Singh said on the sidelines of 8th Asia Gas Partnership Summit here.


GAIL was keen to buy part of Ophir Energy Plc's remaining 20% stake in blocks 1, 3 and 4, which are estimated to hold an estimated 15 trillion cubic feet (tcf) of gas reserves. Pavilion last month offered to pay USD 1.3 billion for a 20 percent stake in three gas blocks offshore Tanzania in East Africa.


Also read: Divest non-core assets: Oil Secretary to ONGC


While Singh refused to give details, industry sources said GAIL had put a price of about USD 600 million for a 10 percent interest. Pavilion Energy, established by Singapore's sovereign wealth fund Temasek earlier this year, in a statement last month announced the acquisition saying the transaction is scheduled to be completed in the first quarter of 2014.


The firm said it has "entered into an agreement to purchase 20 percent interest in Tanzania blocks 1, 3 and 4 from Ophir Energy for a consideration of USD 1.288 billion."


GAIL is aggressively tying up liquefied natural gas (LNG) supplies to meet rising energy needs of the country. The first deliveries from Tanzania blocks are scheduled to start in 2020. BG Group is the operator of the three blocks with 60 percent stake.


With Ophir, GAIL is hoping to follow footsteps of ONGC Videsh Ltd. (OVL) into hyrocarbon-rich Africa. OVL has in two transactions acquired 20 percent stake in a giant gas block off Mozambique for over USD 5 billion.


East Africa has come into focus following massive gas discoveries in deep waters off the coast of Mozambique, which neighbours Tanzania. The region is ideally placed to serve Asian export markets and so has attracted Indian firms that are trying to secure energy for the nation's growing energy needs.


GAIL has tied LNG supplies from the US to Russia and Ophir would have given it the first foothold in Africa. Ophir, which counts steel tycoon Lakshmi Mittal among its investors, has interests in five blocks in Tanzania. Mittal Investments Sarla holds 4.51 percent stake in the company.


Besides 40% interest in blocks 1, 3 & 4, Ophir has 80 percent operating interest in block 7 and a 70 percent operating interest in East Pande.



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First Published on Dec 3, 2013 11:11 am
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